Transforming an unused quarry : choosing between two alternative projects : a feasibility study of setting up a go-karting facility or a boat storage yard

Abstract

PURPOSE: The main objective of the study is to assess the financial viability, or otherwise, of operating a go-karting facility or a boat storage yard, after a disused soft stone quarry is back filled with inert waste. After conducting such feasibility studies, if any of the project results to be feasible, the best business opportunity is chosen. DESIGN: The study is mainly supported by primary data from questionnaires and interviews with relevant persons. An in-depth research of the capital outlay was essential to commence planning either of the two projects and the infilling facility. Moreover, the following estimates were arrived at: demand, revenues and expenditures, profit or loss projections and cash flow forecasts. Additionally, literature regarding capital budgeting was consulted to determine the most effective tool to use for investment appraisal. FINDINGS and CONCLUSIONS: The results indicated that the go-karting facility should be rejected. On the other hand, the boat storage yard gave rise to a positive high net present value and hence it was advised to be implemented. However, the acceptance decision lies in the hands of the owners. IMPLICATIONS/VALUE: This study is useful since in areas like Mqabba, there are big clusters of quarries, most of them unused and some of them still in operation. It would therefore set an example of how informed decision making should be done, and reduce the tendency of relying only on instinctive feelings. Every quarry owner is interested to make the most of his asset, both when in operation and after finishing extracting raw materials from it.